Modern Plastics Corporation v. McCulloch

• Decision Date: 29 August 1968
• Docket Number: No. 18576.,18576.
• Citation: 400 F.2d 14
• Parties: MODERN PLASTICS CORPORATION, Plaintiff-Appellee, v. Frank W. McCULLOCH, John H. Fanning, Howard Jenkins, Jr., Gerald A. Brown, Sam Zagoria, Individually and As Chairman and Members of and Constituting the National Labor Relations Board, and Jerome H. Brooks, Individually and As Regional Director of the Seventh Region of the National Labor Relations Board, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

400 F.2d 14 (1968)

MODERN PLASTICS CORPORATION, Plaintiff-Appellee, v. Frank W. McCULLOCH, John H. Fanning, Howard Jenkins, Jr., Gerald A. Brown, Sam Zagoria, Individually and As Chairman and Members of and Constituting the National Labor Relations Board, and Jerome H. Brooks, Individually and As Regional Director of the Seventh Region of the National Labor Relations Board, Defendants-Appellants.

No. 18576.

United States Court of Appeals Sixth Circuit.

August 29, 1968.

Solomon I. Hirsh, Atty., N. L. R. B., Washington, D. C., for appellants, Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Assoc. Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Clarence R. Feldman, Atty. N. L. R. B., Washington, D. C., on brief.

Theophil C. Kammholz, Chicago, Ill., for appellee, Robert C. Claus, Tyree C. Derrick, Jr., Chicago, Ill., on brief, Vedder, Price, Kaufman & Kammholz, Chicago, Ill., Schmidt, Smith, & Howlett, Grand Rapids, Mich., of counsel.

Before PHILLIPS, CELEBREZZE and McCREE, Circuit Judges.

CELEBREZZE, Circuit Judge.

This is a case where the Company, Modern Plastics Corporation, seeks to short-cut the usual route for contesting National Labor Relations Board decisions because the Board allegedly acted in excess of its delegated powers. The Board, after a hearing as required by Section 9(c) of the Act, 29 U.S.C. § 159(c), directed the Regional Director to conduct a representation election among the Company's employees on or before March 7, 1968. Modern Plastics filed a complaint in the United States District Court for the Western District of Michigan asking that the election be enjoined because the Board had not, prior to its election hearing, conducted an investigation as required by Section 9(c) to determine if there was "* * * reasonable cause to believe that a question of representation affecting commerce existed * * *." 29 U.S.C. § 159(c). The District Court enjoined the Board from conducting the scheduled election and the Board has appealed. We reverse the judgment of the District Court and remand the case with directions to dismiss the complaint.

After almost twenty-four years of apparently harmonious labor relations with the Modern Plastics Employees' Committee, the labor problems of the Company began on June 16, 1964, when District 39, International Association of Machinists and Aerospace Workers, AFL-CIO (hereinafter "IAM"), filed a representation petition with the National Labor Relations Board. A hearing on the petition was set for July 15, 1964; but, after a conference with counsel for the Company, the Regional Director notified all parties of his intention to dismiss the petition because an existing contract between Modern Plastics and the Employees' Committee would act as a bar to any representation proceeding.¹ Before the petition was dismissed, however, IAM filed an unfair labor practice charge alleging that the Company dominated the Employees' Committee in violation of Section 8(a) (1) and (2) of the Act, 29 U.S.C. § 158(a) (1) and (2). Following established Board procedure, the Regional Director notified all parties that he would suspend action on the representation proceeding pending the outcome of the unfair labor practice charge.

A complaint was filed on the charge, and after the usual hearings the Board found that the Company had violated Section 8(a) (1) and (2) in its dealings with the Employees' Committee and ordered the Committee to be disestablished. On petition to review, we disagreed with the Board and set aside its order, finding that substantial evidence did not support the Board's determination that the Committee was company-dominated. Modern Plastics Corporation v. National Labor Relations Board, 379 F.2d 201 (6th Cir. 1967).

Issuance of our mandate, however, did not resolve Modern Plastics' labor difficulties. On June 13, 1967, IAM requested that its representation petition filed in 1964 be reopened;² and shortly after the Board closed the unfair labor practice case on September 13, 1967, the Regional Director reactivated the representation petition and scheduled a hearing for October 3, 1967. The Company then filed a motion requesting a current showing of interest, in response to which IAM submitted approximately 145 authorization cards that allegedly had been recently signed by Modern Plastics employees. But when the Company offered a list of employees against which to check the cards, the Regional Director refused the list stating that he was administratively satisfied that IAM had made a sufficient current showing of interest. Finally, on October 24, 1967, a hearing was held on the representation petition. After the usual procedures, the Board issued a Decision and Direction of Election on February 6, 1968, directing that an election be held on or before March 7, 1968.

Before the date of the election the Company sought the instant injunction alleging several grounds for relief. The District Court found all the grounds without merit except one. Relief was granted because the Board had "* * * failed to conduct the investigation required by Section 9(c) of the Labor Management Relations Act, 29 U.S.C. § 159 (c), and Sections 101.17 and 101.18 of the National Labor Relations Board's Statements of Procedure, Series 8, as amended * * *". We agree with the District Court's disposition of the other grounds for relief, but hold that the Court should have also dismissed the complaint as to the alleged failure to investigate.

Before proceeding to the merits of the case, we must dispose of the Company's contention that this appeal is moot since the date of the scheduled election passed before the notice of appeal was filed. It is clear from the District Court's order that the Board was enjoined from conducting any election among the Company's employees unless it conducted a new representation investigation. If we dismissed this case as moot and the Board attempted to set a new date for election based on the findings of its previous hearings, it would stand the risk of being held in contempt of court; or, at the least, its efforts would be frustrated by the issuance of another injunction. Under the circumstances, the question of the election remains unresolved; therefore the merits of the case are before us and must be decided. Division 1287 of Amalgamated Ass'n of Street, Electric Railway and Motor Coach Employees v. State of Missouri, 374 U.S. 74, 78, 83 S.Ct. 1657, 10 L.Ed.2d 763 (1963).

On the merits, both parties ask us to make slight variations on the established law concerning direct judicial review of Board actions. In Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958), the Supreme Court held that a federal district court had subject matter jurisdiction of a suit "* * * to strike down an order of the Board * * * contrary to a specific prohibition in the Act." 358 U.S. at 188, 79 S.Ct. at 184. Modern Plastics asks us to extend "* * the painstakingly delineated procedural boundaries of Kyne * * *"³ to include cases where the Board fails to perform a mandatory requirement of the Act. Miami Newspaper Printing Pressmen's Union Local 46 v. McCulloch, 116 U.S.App.D.C. 243, 322 F.2d 993, 997 (1963); Cf. Brotherhood of Railway and Steamship Clerks, etc. v. Association For Benefit of Non-Contract Employees, 380 U.S. 650, 85 S.Ct. 1192, 14 L.Ed.2d 133 (1965). Conversely, the Board argues that the Leedom v. Kyne procedure is available only to unions since an employer can almost invariably obtain review of the Board's action by refusing to bargain with the certified representative. But see Boire v. Greyhound Corporation, 376 U.S. 473, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964).⁴ We find it unnecessary to reach either of these questions since it is clear to us that the pre-hearing investigation by the Board in this case satisfied the statutory mandate.

A merely erroneous or arbitrary exertion of authority by the Board will not ordinarily justify injunctive intervention, Eastern Greyhound Lines v. Fusco, 323 F.2d 477 (6th Cir. 1963); American Metal Products Company v. Reynolds, 332 F.2d 434 (6th Cir. 1964); Uyeda v. Brooks, 365 F.2d 326 (6th Cir. 1966); but Leedom v. Kyne indicates that the District Court at least had jurisdiction to determine if the contested Board action was plainly beyond the bounds of the Act, or clearly in defiance of it. Cf. McCulloch v. Libby-Owens-Ford Glass, Co., 403 F.2d 916 (D.C.Cir. 1968).

In this case, the Board allegedly ignored that part of Section 9(c) that provides: "Whenever a petition shall have been filed * * * the Board shall investigate such petition * * *." But the required investigation need only be sufficient to give a "* * * reasonable cause to believe that a question of representation affecting commerce exists * * *." 29 U.S.C. § 159(c). So the question immediately arises as to the limitations on the extent of the District Court's inquiry into the Board's investigation. It is doubtful that limitations on the review of a standard set so plainly within the discretion of the Board can ever be clearly delineated. Perhaps the plenary review sought here is even less appropriate since the only purpose of the investigation is to determine whether to hold a hearing where the issues of the existence of a question of representation will be further examined in an adversary type proceeding.⁵ But the statute requires an investigation, and in light of the language in the analogous case of Brotherhood of Railway Clerks, etc. v. Association For Benefit of Non-Contract Employees, 380 U.S. 650, 85 S. Ct. 1192, 14 L.Ed.2d 133 (1965), we will assume without deciding, that a complete failure to investigate would invalidate the Board's direction of election and that the District Court could inquire to some limited extent into the sufficiency of the investigation.

On our first assumption, we do not read the District Court's opinion as finding that the Board conducted absolutely no investigation.⁶ If such a finding was made, it would be...